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Discounting hits sales at New Look

Like-for-like UK sales at New Look dropped 10.7% for the 39 weeks to 23 December, amid “challenging trade” and high levels of discounting at the troubled retailer.

Group like-for-like sales fell 10.6% for the quarter, while group revenue dropped 6.3% compared to 2016, down to £1bn.

Own website sales were down 15% year on year, but third party online sales were up 21.9%.

Adjusted EBITDA for the period was £43.8m, while the business made an operating loss of £5.1m and a loss before tax of £123.5m. New Look did not provide year on year profit comparisons.

Alistair McGeorge, executive chairman, said he was confident he could rebuild New Look’s position in the UK market and restore long-term profitability.

“As we expected, Q3 trading remained challenging, with sales and margins impacted by the high level of discounts. Our immediate priority is to exit the current financial year without excess stock. By entering FY19 with clean stock levels we will be in a good position to deliver a strong full price spring/summer offer.

“I am confident that we are now making the necessary changes to get the company back on track and we continue to have sufficient liquidity to deliver our plans. We are focusing on reducing costs, recovering the broad appeal of our product and reconnecting with our customers.

“We are already realigning our pricing to offer significantly better value, adding flexibility to our buying model, and improving our speed to market. Additionally, we are working hard to achieve a better alignment between ecommerce and stores. Taken together, this will help to drive future full price sales.”

 

Readers' comments (1)

  • Clearly they have managerial issues, as the brand is going down the excessive discount route and it is not working (it never does).

    Yet another example of a retailer that doesn't understand the marketplace.

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